1 answer

The following selected data for Dawson Inc. for 2017 was gathered by its accountants, who are...

Question:

The following selected data for Dawson Inc. for 2017 was gathered by its accountants, who are responsible for preparing the financial statements:

Cost of good sold                             $56,500

Amortization Expense                    14,000

Other operating expenses           17,700

Loss on sale of investments         1,500

Gain on sale of capital assets      8,500

Sales revenue                                    95,600

Interest revenue received            5,200

Dividend revenue received          2,500

Salary expense                                  27,200

Interest expense paid                     5,900

Income tax expense                        2,400

The cash balance on Jan. 1, 2017 has a balance of $15,000 and on Dec. 31, 2017, had a balance of $208,500

Other data gathered by the accountants for 2017:

Accounts receivable decreased                                  $13,600

Inventory increased                                                      6,800

Prepaid expenses decreased                                      2,700

Accounts payable increased                                         21,400

Salary payable increased                                               1,500

Accrued liabilities decreased                                       4,300

Income tax payable increased                                     800

Acquisition of capital assets                                        46,000

Issuance of common shares                                         80,000

Proceeds from sale of investments                           35,000

Collection of loan principal                                          22,600

Payment of dividend                                                      15,000

Proceeds of sale of capital assets                             31,700

Proceeds from sale of repurchase of shares          45,000

In good form prepare the statement of cash flow for the year ended December 31,2017 using the direct method.


Answers

so $ 22,500 Dawson Inc. Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities: Ca

Cash collection from customers = Sales revenue + Decrease in accounts receivable
Cash collection from customers = $95,600 + $13,600
Cash collection from customers = $109,200

Cash received for interest = Interest revenue
Cash received for interest = $5,200

Cash received for dividend = Dividend revenue
Cash received for dividend = $2,500

Cash paid for interest = Interest expense
Cash paid for interest = $5,900

Cash paid to suppliers = Cost of goods sold + Increase in inventory - Increase in accounts payable
Cash paid to suppliers = $56,500 + $6,800 - $21,400
Cash paid to suppliers = $41,900

Cash paid for other operating expenses = Other operating expenses - Decrease in prepaid expenses + Decrease in accrued liabilities
Cash paid for other operating expenses = $17,700 - $2,700 + $4,300
Cash paid for other operating expenses = $19,300

Cash paid to employees = Salary expense - Increase in salary payable
Cash paid to employees = $27,200 - $1,500
Cash paid to employees = $25,700

Cash paid for income tax = Income tax expense - Increase in income tax payable
Cash paid for income tax = $2,400 - $800
Cash paid for income tax = $1,600

.

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